Background
In 1978, an irrevocable power of attorney documented three contemporaneous purchases totaling 6,000 square meters from the same sellers: 2,000 square meters by the deceased Omar Abd al-Fattah Abu al-Hilal, 3,000 square meters by the appellants, and 1,000 square meters by respondent 17. The sellers, however, subsequently acquired only 4,000 square meters of the relevant parcel from the Development Authority. The deceased and later his heirs possessed and cultivated the olive-planted area attributed to him for decades.
After third parties were registered as owners in 2014 and partition proceedings followed, the appellants and respondent 17 registered the sellers’ entire 4,000-square-meter interest in their own names. The deceased’s heirs were consequently left with no registered interest. The Haifa District Court found that the power of attorney satisfied the statutory writing requirement and embodied three independent but equally ranked transactions made at the same time. It also found that the registered purchasers knew of the deceased’s rights and longstanding possession and therefore lacked good faith when they registered the entire available area.
The District Court held that fairness required all purchasers to bear proportionately the shortfall from 6,000 to 4,000 square meters. It awarded each purchaser two-thirds of the area originally purchased, entitling the heirs to register 1,333 square meters, to be deducted proportionately from the registered rights of the appellants and respondent 17. The appellants challenged the characterization of the transactions, the governing priority rules, the finding of bad faith, and the proportional remedy.
The Court’s Holding
The Supreme Court unanimously dismissed the appeal under Regulation 148(b) of the Civil Procedure Regulations, 2018. It found no basis to disturb the District Court’s factual findings, concluded that those findings supported its legal conclusions, and identified no legal error in the judgment.
The Court added that the District Court had reached a just, fair, and balanced resolution of the parties’ property rights. It specifically endorsed the proportional allocation formula under which every purchaser bears the same relative reduction caused by the discrepancy between the 6,000 square meters sold and the 4,000 square meters actually available.
The appellants were ordered to pay NIS 10,000 in costs jointly to respondents 1–16 and an additional NIS 10,000 to respondent 17.
Key Takeaways
- A purchaser seeking priority based on completed registration must remain in good faith through the time of registration.
- Purchasers who knew of another buyer’s rights and longstanding possession could not gain priority by registering the entire available interest and leaving that buyer with nothing.
- Where contemporaneous, equally ranked purchases exceeded the sellers’ available interest, the courts upheld a proportional reduction allocating two-thirds of each purchaser’s contracted area.
Why It Matters
The decision confirms that registration does not automatically defeat an unregistered competing interest when the registrant acted with knowledge of that interest and without good faith. Longstanding possession and cultivation can be important evidence that a later registrant knew another purchaser held rights in the property.
It also illustrates an equitable response to a common-title shortfall: when same-day purchasers have equal-ranking claims but the sellers cannot convey the full area promised, the loss may be shared proportionately rather than imposed entirely on the party who registered last.